MRF Limited

Consumer Cyclical — Auto Parts · NSE

₹1,22,630.00+₹360.00 (+0.29%)

DalalBaazaar Score

73 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of MRF Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

MRF Limited, together with its subsidiaries, engages in the manufacture and sale of rubber products in India and internationally.

IndustryAuto Parts

SectorConsumer Cyclical

Employees16,283

Annual revenue₹30,932 Cr

How does it make money?

Turns over ₹30,932 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation. Each of its 16,283 employees supports ₹1.90 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin16.6%

Net margin7.8%

Revenue / employee₹1.90 Cr

Who are its competitors?

The closest listed comparisons in its industry are BOSCH LIMITED, MARUTI SUZUKI INDIA LTD., TVS MOTOR COMPANY LTD, EICHER MOTORS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

BOSCH LIMITEDP/E 56.9x · ROE 15.9%

MARUTI SUZUKI INDIA LTD.P/E 25.2x · ROE 13.4%

TVS MOTOR COMPANY LTDP/E 56.8x · ROE 35.8%

EICHER MOTORS LTDP/E 34.7x · ROE 23.0%

What is its competitive advantage?Some evidence

ROCE of 15.6% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE15.6%

ROE11.6%

Peer median ROE23.0%

What is the outlook?

8 analysts covering the stock expect revenue to grow about 9.9% and earnings to grow about 33.4% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+9.9%

Est. earnings growth+33.4%

Analysts8

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +35% while net margin moved +133% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+35%

Margin effect+133%

DalalBaazaar Score

73/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.15 — historically steadier than the index
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

75/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

77/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

21.5x

3Y Median

30.1x

40 monthly readings · mean 40.4x · range 21.4x–80.6x

Sector Median

45.7x

median of 4 sector peers

🟢Current valuation is approximately 28% below its 3y median of 30.1x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 53% below the peer median of 45.7x.

vs. its own history

Cheap

30.1x median over 40 months · -28%

vs. sector peers

Cheap

45.7x median of 4 peers · -53%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

21.5x

P/B

2.48x

EV/EBITDA

10.7x

PEG

0.46

Dividend Yield

0.19%

What's Good / What's Bad

🟢 What's Going Well7

Margins are improving
EBITDA margin is up from 11.1% to 16.6% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from 5.2% to 11.6%.
Return on capital is rising
ROCE has improved from 8.2% to 15.6%.
Valuation below its historical average
At 21.5x the stock trades 28% below its own median of 30.1x.
Very low debt
Debt/Equity of 0.15x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 11.1% to 16.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 28% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 53% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹3,156 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 8% a year✓ 10.6% CAGR
Latest reported year was 9.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 15%✓ 16.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹3,156 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 13%✓ 15.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 6 neutral · 1 weak

Market Cap

₹52,009 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

21.5x

Fair

Fairly valued against the generic band

P/B Ratio

2.48x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹5,694.39

Profitable

Profitable on a per-share basis

ROE

11.6%

Moderate

Moderate capital efficiency

ROCE

15.6%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.15x

Low

Conservative leverage

Revenue Growth (YoY)

9.6%

Modest

Modest growth

Profit Growth (YoY)

-1.0%

Falling

Profits are shrinking

Dividend Yield

0.19%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹3,156 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹1,22,630

P/E (Forward)

18.3x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

6.5%

Average

Average margins

Net Margin

7.6%

Average

Average bottom-line conversion

Current Ratio

1.65

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.15

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

123539.0 / 128152.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

43.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹22,851 Cr	₹25,011 Cr	₹27,975 Cr	₹30,932 Cr	+10.6%
EBITDA	₹2,543 Cr	₹4,426 Cr	₹4,270 Cr	₹5,149 Cr	+26.5%
EBITDA Margin	11.1%	17.7%	15.3%	16.6%	—
PAT (Net Profit)	₹769 Cr	₹2,081 Cr	₹1,873 Cr	₹2,426 Cr	+46.7%
EPS	₹1,813.04	₹4,907.24	₹4,416.92	₹5,720.37	+46.7%
ROE	5.2%	12.5%	10.1%	11.6%	—
ROCE	8.2%	16.4%	13.7%	15.6%	—
Total Debt	₹3,014 Cr	₹2,822 Cr	₹3,771 Cr	₹3,207 Cr	+2.1%
Free Cash Flow	-₹536 Cr	₹1,140 Cr	₹555 Cr	₹3,156 Cr	—

🟢 Revenue has grown at 10.6% a year over 3 years.

🟢 EBITDA has grown at 26.5% a year over 3 years.

🟢 EBITDA Margin has risen from 11.1% to 16.6% over 3 years (+5.5 pts).

🟢 PAT (Net Profit) has grown at 46.7% a year over 3 years.

🟢 EPS has grown at 46.7% a year over 3 years.

🟢 ROE has risen from 5.2% to 11.6% over 3 years (+6.3 pts).

🟢 ROCE has risen from 8.2% to 15.6% over 3 years (+7.4 pts).

🔴 Total Debt has grown at 2.1% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹536 Cr to ₹3,156 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹31,954 Cr

Total Liabilities

₹10,979 Cr

Total Debt

₹3,207 Cr

Cash & Equivalents

₹305 Cr

Operating Cash Flow

₹4,590 Cr

Capex

-₹1,434 Cr

Shareholding (proxy)

Institutional Holding

18.6%

Insider Holding

47.9%

Corporate Actions

Next Earnings

12 Nov 2026

Dividend Rate

₹235

Ex-Dividend Date

17 Jul 2026

Analyst Consensus

Recommendations

5 Buy · 2 Hold · 4 Sell

Target Price (Mean)

₹1,38,451

+12.9% vs CMP

Target Range

₹1,06,123 – ₹1,65,238

Peer Comparison

Company	P/E	ROE
BOSCH LIMITED	56.9x	15.9%
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TVS MOTOR COMPANY LTD	56.8x	35.8%
EICHER MOTORS LTD	34.7x	23.0%

Recent News

3 mixed3 general

MRF Share Price after fresh 52-week low; key fundamentals

Univest, 15 Oct

The MRF Story: Why India's Costliest Stock Isn't Actually Expensive

HDFC Sky, 28 Sept

MRF Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

MRF stock extends losses after Q1 results; CLSA bullish, sees 26% upside on margin recovery hopes

Moneycontrol.com, 12 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

MRF (MRF) Share/Stock Price Live, BSE

TechGraph, 12 Sept

MRF Q1 Results: PAT dips 6% YoY to Rs 479 crore; shares fall 3% amid sharp margin contraction

The Economic Times, 11 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟢Business QualityStrong13/20

🟢Financial HealthStrong17.8/20

🟢GrowthStrong16.1/20

🟡ProfitabilityModerate9.6/15

🟢ValuationAttractive10.7/15

🟡RiskModerate5.7/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last.

This thesis breaks if

✓Revenue growth stays above 8% a year10.6% CAGR
✓EBITDA margin holds above 15%16.6%
✓Free cash flow remains positive₹3,156 Cr
✓Debt / EBITDA stays below 2x0.6x
✓ROCE stays above 13%15.6%